AUSTRAC Targets Crypto ATM Providers in Crackdown on Money Laundering

Australia’s national financial intelligence agency, the Australian Transaction Reports and Analysis Centre (AUSTRAC), has announced that it will prioritize cryptocurrency in the upcoming year. As part of its strategy, AUSTRAC is launching a new task force aimed at cracking down on crypto ATM providers that may be violating Anti-Money Laundering (AML) laws.

The agency’s CEO, Brendan Thomas, emphasized the growing concern over the criminal use of cryptocurrency and crypto ATMs, which he described as being particularly vulnerable to illicit activities. According to Thomas, these platforms are often used by criminals for money laundering because they enable near-instant and irreversible transfers and are easily accessible to the public.

AUSTRAC’s Focus on Crypto ATMs

The Australian government agency’s shift in focus comes as the crypto industry continues to expand, and with it, concerns about illicit use of digital currencies. Crypto ATMs, which allow users to convert fiat currency into cryptocurrencies like Bitcoin, have grown in popularity in Australia. However, their rapid expansion has raised alarm about their potential use for criminal activity, particularly money laundering.

Thomas stated:

“Cryptocurrency and crypto ATMs are attractive avenues for criminals looking to launder money, as they are widely accessible and make near-instant and irreversible transfers. This is the first step in AUSTRAC’s focus to reduce the criminal use of cryptocurrency in Australia.”

The new task force will concentrate on ensuring that crypto ATM operators adhere to minimum legal standards to reduce the risk of illicit funds being processed.

Regulatory Requirements for Crypto ATM Operators

As part of the existing regulations, crypto ATM operators in Australia are required to meet several obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF). These include:

• Registration with AUSTRAC
• Know Your Customer (KYC) procedures to verify the identity of users
• Transaction monitoring to detect suspicious activities
• Reporting suspicious transactions and submitting threshold transaction reports for cash deposits and withdrawals over $6,500 (AUD 10,000)

AUSTRAC has made it clear that operators found non-compliant will face severe financial penalties. This includes fines and possible jail time for those found violating AML laws. If the laundered funds exceed a certain threshold, penalties can be even more severe.

For example, the maximum penalty for money laundering in Australia is 12 years in prison and a fine of more than $100,000. If the amount of laundered funds exceeds $644,400, penalties can increase to up to 25 years in prison and fines of up to $214,585.

Australia has become a significant hub for Bitcoin and cryptocurrency ATMs, now ranking as the third-largest in the world. According to Coin ATM Radar, the country has seen a dramatic increase in the number of crypto ATMs, growing from just 67 machines in August 2022 to more than 1,302 ATMs by the end of 2023.

This rapid adoption of crypto ATMs is partly driven by private firms flooding the market toward the end of 2022. By April 2023, Australia surpassed Asia’s Bitcoin ATM count, which includes major economies like China, Japan, Singapore, and India. While the US remains the global leader with over 31,000 Bitcoin ATMs, Australia’s growth has positioned it as a prominent player in the market.

Growing Concern and AUSTRAC’s Future Role

With over 400 digital currency exchanges registered with AUSTRAC, the agency’s attention is turning to non-compliant operators and those who might be engaging in or facilitating money laundering or other illicit activities. As the crypto market continues to expand, AUSTRAC’s task force will play a critical role in ensuring that the industry remains within the bounds of the law.

The regulatory shift is part of a broader global effort to bring greater oversight and compliance to the growing cryptocurrency market. As governments and regulators worldwide seek to control the risks of money laundering, terrorist financing, and other financial crimes, Australia’s increased focus on crypto ATMs underscores the need for the industry to adapt to changing legal frameworks.

In summary, AUSTRAC’s new task force represents the next step in tightening control over the cryptocurrency sector, ensuring that crypto ATM providers are held accountable and adhere to anti-money laundering regulations.